For each unit produced, a company expects to use 4.5 pounds of material at a cost...

  

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For each unit produced, a company expects to use 4.5 pounds of material at a cost of $3.25 per pound. It also expects each unit to require 1.75 hours of direct labor to complete, and it expects the wage rate to be $13 per hour. During the month, the company purchased 35,000 pounds of material for $105,000, and used all 35,000 pounds of material to produce 8,000 units. The company actually incurred direct labor costs amounting to $177,000 for the 15,000 direct labor hours actually worked during the month. 4. What is the company's direct materials price variance? Indicate whether the variance is favorable or unfavorable. 5. What is the company's direct materials quantity variance? Indicate whether the variance is favorable or unfavorable. For each unit produced, a company expects to use 4.5 pounds of material at a cost of $3.25 per pound. It also expects each unit to require 1.75 hours of direct labor to complete, and it expects the wage rate to be $13 per hour. During the month, the company purchased 35,000 pounds of material for $105,000, and used all 35,000 pounds of material to produce 8,000 units. The company actually incurred direct labor costs amounting to $177,000 for the 15,000 direct labor hours actually worked during the month. 4. What is the company's direct materials price variance? Indicate whether the variance is favorable or unfavorable. 5. What is the company's direct materials quantity variance? Indicate whether the variance is favorable or unfavorable.

Answer rating: 100% (QA)

To calculate the variances well use the following formulas Direct Materials Price Variance Direct Materials Price Variance Actual Price Standard Price ... View the full answer